China's Suzhou unveils rules to cap home price rises

The cost of new homes increased in more Chinese cities in November than in the previous month, official figures showed on Tuesday

BEIJING: Authorities in China's Suzhou city have introduced measures to cool a red-hot housing market by putting a cap of 12 percent on annual home price gains, the local government said on Friday.

The move would make Suzhou the first second-tier city to rein in surging home prices after senior officials raised concerns about the country's overheated housing market during an annual parliament meeting this week.

China's four biggest cities including Shenzhen, Shanghai and Beijing, where prices surged most, were also working on measures to cool the market in response to recent strong sales and prices gains.

Developers in Suzhou will be unable to raise their projects' selling prices within three months when applying for pre-sale approvals from local administrators, according to a statement on the Suzhou government's website.

A maximum price rise of 6 percent within six months will be allowed for housing projects designated to be sold during the same phase.

Developers in China tend to launch their projects in staggered phases to avoid a supply glut and give themselves room to adjust prices according to market conditions.

Suzhou's home prices rose 5.6 percent in February from the previous month, the second-best performer of 100 major Chinese cities tracked by the China Real Estate Index System.

China's housing market bottomed out in the second half of 2015 on government support measures, but a strong rebound in prices in the biggest cities has sparked concerns that some markets may be overheating.

The recovery remains uneven across the country as small cities still face huge inventories of unsold homes, discouraging new investment and construction.